Bank of America to forgive 150,000 second liens

Updated: Oct 2, 2012 10:12 AM EDT

BofA's move completely extinguishes the unpaid balance on second lien debt for qualified homeowners. (©Hemera/Thinkstock)

More from MortgageLoanMore>>
Mortgage and home tax deductions
Mortgage and home tax deductions
What federal tax deductions can you take for a mortgage and other home ownership expenses?
What federal tax deductions can you take for a mortgage and other home ownership expenses?
The special rules for condo mortgages
The special rules for condo mortgages
A condominium offers many of the advantages of home ownership with fewer of the hassles. That is, unless you're talking about getting a mortgage for one.
A condominium offers many of the advantages of home ownership with fewer of the hassles. That is, unless you're talking about getting a mortgage for one.
Are home equity loans coming back?
Are home equity loans coming back?
Wondering if you can qualify for a home equity loan? Recent indications suggest that second mortgages are on the rebound, but that doesn't necessarily mean they're easier to get.
Wondering if you can qualify for a home equity loan? Recent indications suggest that second mortgages are on the rebound, but that doesn't necessarily mean they're easier to get.
Last chance to refinance?
Last chance to refinance?
Mortgage rates have been on the rise. Is this your last, best chance to refinance and save money with a super low rate?
Mortgage rates have been on the rise. Is this your last, best chance to refinance and save money with a super low rate?
Why you might consider an adjustable-rate mortgage
Why you might consider an adjustable-rate mortgage
You don't hear much about adjustable-rate mortgages these days, but for the right kind of borrower, they're still an attractive option.
You don't hear much about adjustable-rate mortgages these days, but for the right kind of borrower, they're still an attractive option.
5 questions for potential homebuyers
5 questions for potential homebuyers
With housing prices and mortgage rates as low as they are, many are tempted to take the plunge and become first-time homeowners. But how do you know if you're truly ready?
With housing prices and mortgage rates as low as they are, many are tempted to take the plunge and become first-time homeowners. But how do you know if you're truly ready?

By Peter King
Provided by

Bank of America is erasing the debt on 150,000 second liens for mortgage borrowers in financial difficulty, the lender has announced.

The move completely extinguishes the unpaid balance on second lien debt for qualified homeowners, who are being informed of their eligibility by mail. Mailings to eligible customers began in July.

Customers chosen for the offer will typically be those who are currently in default on their second liens. Bank of America said it is undertaking the measure in order to help eligible homeowners get back on track financially with their primary mortgages and avoid foreclosure.

A small number who are current on their second liens but in difficulty with their primary mortgages will also receive the offer to have their debt erased.

The initiative is one of the customer relief programs Bank of America is initiating in partial fulfillment of its obligations under the $25 billion foreclosure abuses settlement reached by Bank of America and four other major mortgage lenders with federal authorities and state attorneys general.

Second liens will be automatically eliminated for borrowers receiving the offer unless they contact Bank of America within 30 days to opt out. Some borrowers may choose to opt out because there could be tax implications, with the forgiven debt counted as income for tax purposes.

Extinguished second liens will be reported as paid in full and closed, so there should not be any negative effects on borrower's credit ratings, according to Bank of America.

Borrowers will not be able to apply on their own to have second liens extinguished; only those contacted by Bank of America will be eligible. In addition, the program only applies to second liens serviced or held by Bank of America.

Mortgage Rates at MortgageLoan.com

View the original story here: http://www.mortgageloan.com/bofa-forgive-150k-second-liens-9256

Visit Mortgageloan.com to compare mortgage rates in your area.

More about the economyMore>>
Building toward recovery
Building toward recovery
Construction leads the way, but the recovery is affecting a broader base of businesses, according to a new study.
Construction leads the way, but the recovery is affecting a broader base of businesses, according to a new study.
Economy may have lasting effect on young people's outlook
Economy may have lasting effect on young people's outlook
Happiness seems be a generational thing, new research suggests. Life satisfaction generally increases with age, but a person's overall level of satisfaction appears to depend on when he or she was born.
Happiness seems be a generational thing, new research suggests. Life satisfaction generally increases with age, but a person's overall level of satisfaction appears to depend on when he or she was born.
What the new mortgage rules mean for borrowers
What the new mortgage rules mean for borrowers
The CFPB has rolled out long-awaited new rules for residential mortgages. So what will be the impact on mortgage borrowers?
The CFPB has rolled out long-awaited new rules for residential mortgages. So what will be the impact on mortgage borrowers?
New qualified mortgage rules released
New qualified mortgage rules released
Long-awaited "qualified mortgage" rules have been issued by the CFPB, setting forth guidelines to protect borrowers from predatory lending.
Long-awaited "qualified mortgage" rules have been issued by the CFPB, setting forth guidelines to protect borrowers from predatory lending.
House joins Senate to OK bill that avoids fiscal cliff
House joins Senate to OK bill that avoids fiscal cliff
The House of Representatives settled on an 11th-hour agreement that averted widespread tax increases and spending cuts that were set to kick in Jan. 1.
The House of Representatives settled on an 11th-hour agreement that averted widespread tax increases and spending cuts that were set to kick in Jan. 1.
Fiscal cliff: Mortgage deduction is safe for most
Fiscal cliff: Mortgage deduction is safe for most
Should you be worried that Congress will take away your mortgage interest deduction as part of the "fiscal cliff" negotiations? For most homeowners, the answer is "no."
Should you be worried that Congress will take away your mortgage interest deduction as part of the "fiscal cliff" negotiations? For the great majority of homeowners, the answer is "no."

INFORMATIONAL DISCLAIMER The information contained on or provided through this site is intended for general consumer understanding and education only and is not intended to be and is not a substitute for professional financial or accounting advice. Always seek the advice of your accountant or other qualified personal finance advisor for answers to any related questions you may have. Use of this site and any information contained on or provided through this site is at your own risk and any information contained on or provided through this site is provided on an "as is" basis without any representations or warranties.

Bank of America to forgive 150,000 second liens - WSAV: News, Weather, and Sports for Savannah, GA

Bank of America to forgive 150,000 second liens

More from MortgageLoanMore>>

More about the economyMore>>